Karnataka govt signing up more farmers for crop insurance plan

A review meet by chief minister Siddaramaiah also suggested extending an interest waiver scheme to March next year on account of the drought and deficient rainfall


The state government has a target to disburse Rs11,600 crore loans this fiscal year, up from last year’s Rs10,235 crore. Photo: Hemant Mishra/Mint
The state government has a target to disburse Rs11,600 crore loans this fiscal year, up from last year’s Rs10,235 crore. Photo: Hemant Mishra/Mint

Bengaluru: The Karnataka government is rolling out compulsory crop insurance under Pradhan Mantri Fasal Bima Yojana (PMFBY) as the state reels under its second consecutive drought. Only around 1 million of the state’s 7.8 million plus farmers are currently enrolled in the central scheme, according to a senior official of the state agriculture department.

“We have started compulsory (insurance) premium deductions for almost all loans disbursed,” the official said, requesting not to be named.

On Tuesday, a review meeting by the chief minister also suggested extending an interest waiver scheme, which was to end on 30 September, to March next year on account of the drought and deficient rainfall.

H.S. Mahadeva Prasad, minister of co-operation department and sugar, said loans worth Rs5,396.98 crore were disbursed in 2015-16 to over 1 million farmers. Of this, coffee, tobacco and sugarcane farmers, who do not qualify for crop insurance, account for around half of the beneficiaries.

Launched on 13 January, PMFBY has a budgetary provision of Rs17,600 crore. Prasad said there is a 50:50 agreement between centre and the state—around Rs675 crore each. Meaning, the Karnataka govt and the centre will contribute around Rs675 crore each for the scheme.

The state government has a target to disburse Rs11,600 crore loans this fiscal year, up from last year’s Rs10,235 crore.

After Tuesday’s review meeting, Prasad said the department has proposed to waive Rs177 crore interest for borrowers who have cleared their principal. Loans to the tune of Rs586.85 crore disbursed to over 224,000 farmers in 2015 was still due, he said.

The proposal will now be placed before the state cabinet for approval. The state government has also directed cooperative societies and commercial banks not to forcefully recover farm loans due to the drought announced in at least 110 talukas, or administrative units.

Karnataka has 177 talukas and the continuing dry spell is likely to see the inclusion of at least an additional 50 talukas to the drought affected list, taking this year’s total to around 160 talukas, according to T.B. Jayachandra, law and parliamentary affairs minister of Karnataka, Mint reported on 6 October (bit.ly/2eknhJd).

Last year, the state government declared at least 127 talukas as drought hit and sought central assistance from the National Disaster Response Fund for Rs3,050.7 crore, Mint reported on 15 September 2015.

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